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Bettcher Industries v. Suhner Turbo Trim

United States District Court, N.D. Illinois, Eastern Division.

June 30, 2014

Bettcher Industries, Plaintiff(s),
v.
Suhner Turbo Trim, Defendant(s)

ORDER

VIRGINIA M. KENDALL, District Judge.

This Court grants the Defendants' motion, in part, and transfers this case to the Northern District of Georgia, Atlanta Division.

STATEMENT

Plaintiff Bettcher Industries, Inc. filed suit against defendants Suhner Turbo Trim, LLC, Suhner Manufacturing, Inc., and Otto Suhner AG on December 17, 2013. Bettcher filed its Amended Complaint on March 28, 2014. Bettcher alleges infringement of U.S. Patent Nos. 6, 769, 184, 7, 340, 840, and 8, 074, 363. Although the Defendants moved to dismiss the Bettcher's claims (Dkt. No. 61), the parties have filed a joint stipulation regarding that motion and have asked this Court to deny the Defendants' motion to dismiss (Dkt. No. 65). Accordingly, this Court denies the Defendants' motion to dismiss (Dkt. No. 61) as moot. The Defendants have also moved under 28 U.S.C. § 1404(a) to transfer this case to the United States District Court for the Northern District of Georgia, Rome Division. For the following reasons, this Court grants the Defendants' motion, in part, and transfers this case to the Northern District of Georgia, Atlanta Division.

BACKGROUND

"When deciding a motion to transfer venue, the court must accept as true all of plaintiff's well-pleaded facts in the complaint, unless they are contradicted by affidavits or other appropriate evidence from the defendant." See Video & Sound Service, Inc. v. Intransa, Inc., 12 C 7322, 2013 WL 1568062 (N.D. Ill. Apr. 12, 2013). Accordingly, this Court takes the following facts from the Amended Complaint and from any affidavits submitted by the parties in support of their respective positions. Any factual findings are only for purposes of deciding this motion. Bettcher is a corporation organized and operating under the laws of the State of Delaware, with its principal place of business in Birmingham, Ohio. (Dkt. No. 58 ¶1.) Bettcher manufactures and sells food processing equipment and hand tools including trimming knives. (Dkt. No. 58 ¶18.) Bettcher actively practices the inventions of the patents at issue, employs people in the United States to engage in the research, development, manufacture, service, and sales of products that incorporate the inventions throughout the United States. (Dkt. No. 58 ¶1.) Bettcher practices the patented inventions in its Whizard® Trimmers, which are hand-held devices used for the commercial trimming of meat. Id.

Suhner Turbo is a Georgia limited liability company with its principal place of business in Rome, Georgia. (Dkt. No. 58 ¶2, Luthi Aff. ¶11.) Suhner Turbo competes directly with Bettcher in the food processing equipment market. (Dkt. No. 58 ¶19.) Suhner Turbo sells "Turbo Trim Knives, " which is the product accused of infringement by Bettcher. (Dkt. 58, Complaint ¶19.) All of Suhner Turbo's employees reside and work in or around its headquarters in Rome, Georgia. (Luthi Aff. ¶¶12, 15.) All of Suhner Turbo's documents related to its business including sales and financial records are located in Rome, Georgia. (Luthi Aff. ¶15.) All design, development, and engineering relating to the Turbo Trim Knives occurred in Georgia or outside of the United States. (Luthi Aff. ¶16.) The persons most knowledgeable about the operation, marketing, design, development, testing, manufacturing, and sales of the Turbo Trim Knives reside in or near Rome, Georgia, or outside the United States. (Luthi Aff. ¶17.)

Suhner Manufacturing is a Georgia corporation with its principal place of business in Rome, Georgia. (Dkt. No. 58 ¶3.) All sales documents and financial records for Suhner Manufacturing are located in in the Northern District of Georgia. (Luthi Aff. ¶32.) Suhner Manufacturing has approximately 128 employees at its Rome, Georgia facility. (Luthi Aff. ¶26.) Suhner Manufacturing also has two sales offices, one of which is in Chicago, Illinois. This Chicago office has three employees who work there. (Luthi Aff. ¶27.) According to Luthi, employees in these two sales offices do not perform any functions related to operations, manufacturing, design, finance, or marketing. (Luthi Aff. ¶28.) But the job posting for the manager of the Chicago office stated that the manager would be responsible for promotion and sales of "electric, pneumatic and flexible shaft power tools." (Dkt. No. 58 ¶11.)

Paul Luthi is the president of both Suhner Manufacturing and Suhner Turbo. (Luthi Aff. ¶2.) Luthi not only conceived and developed the idea of entering the rotary knife business in the United States for the Defendants, (Pl.'s Resp. at 3; Luthi Dep. at 34, 58, 61, 71-72, 80), but also led the product development team (Luthi Aff. ¶3). When developing the product, Luthi worked either in Rome, Georgia or outside the United States. (Luthi Aff. ¶¶ 17, 20, 26, 28, 34.)

Otto Suhner is a Swiss corporation with its principal place of business in Switzerland; it has no offices or employees in the United States. (Dkt. No. 58, Complaint ¶4, Luthi Aff. ¶33.) Otto Suhner manufactures the Turbo Trim Knives at its facilities in Switzerland and sells them to another Swiss company, Suhner Abrasive Expert AG. (Luthi Aff. ¶4, 5.) Suhner Abrasive owns 70% of Suhner Turbo and is the supplier and marketing company for Suhner Turbo. (Luthi Dep. at 27:19-28:10, Luthi Aff. ¶9.) Suhner Turbo leases inventory space in Georgia from Suhner Manufacturing, which owns the remaining 30% of Suhner Turbo. (Luthi Aff. ¶¶8-9.)

Luthi reports that sales of Turbo Trim Knives began in March 2009 and continued through August 2013, producing sales of approximately $546, 465 worth of blades and housings for the Turbo Trim Knives in the United States. (Luthi Aff. ¶37.) During that period, Turbo Trim Knives sold less than $2, 000 worth of the accused product in Illinois. (Luthi Aff. ¶38.)

LEGAL STANDARD

Section 1404 of Title 28 of the United States Code provides, "[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." In patent cases, district courts should apply the law of the regional circuit when deciding a motion to transfer under Section 1404. In re Link_A_Media Devices Corp., 662 F.3d 1221, 1223 (Fed Cir. 2011). The moving party has the burden of establishing that venue is proper and must make a prima facie showing to that effect. Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219-20 (7th Cir. 1986). Transfer is appropriate if: (1) venue is proper in the transferor and transferee courts; (2) transfer serves the convenience of the parties and witnesses; and (3) transfer promotes the interest of justice. See FUL Inc. v. Unified School Dist. No. 204, 839 F.Supp. 1307, 1310 (N.D. Ill. 1993). District courts have broad discretion to grant or deny a motion to transfer. See Heller Financial, Inc. v. Midwhey Powder Co., Inc., 883 F.2d 1286, 1293 (7th Cir. 1989). Courts analyzing the convenience of a transfer generally consider the "availability of and access to witnesses, and each party's access to and distance from resources in each forum." ...


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